Thursday, 10 February 2011

Is Social Media worth the cost? Social media is a two-way communication medium and use it effectively businesses need to invest in listening capabilities that capture the activities of their existing or potential customers online.

This more often than not means a subscribing to a specialist engagement dashboard / console, such as Radian6 ($US600 per month - video below), and employing dedicated staff to monitor the Buzz and respond.

Radian6 Promo

Recent research of 10,000 online shoppers by ForeSee Results suggests that the ROI (Return On Investment) for more traditional forms of advertising is better than social media.

As the methodology of this survey is not fully explained it would wise not to take these results at face value. They do however provide a contrary view to the usual social media argument. Not everyone has achieved success through their social media strategies and some of these results could help explain why.

Forsee results found that more visits to retail / ecommerce websites are influenced by more traditional marketing tactics than social media. Promotional emails (19%), search engine results (8%), and Internet advertising (7%), all had more influence.

UK Respondents

US Respondents

In an earlier post I talked about the importance of email - "email remains a potent weapon in the digital marketing arsenal". This study would seem to bear this out.

Customers and prospects prefer to receive email communications and according to the study, a very small 8% of online shoppers responded that social media was their preferred way to interact with a retailer.

Even though just 8% said social media was their preferred method, more than half of all respondents indicated that they would be willing to connect using some form of social media.

Facebook was a clear winner (40%) while Twitter registered only a 4% preference

The other thing to remember is that many businesses still don't know how to use social media effectively to promote their brand or online offering. Social media awareness varies greatly between countries.

If customers are not used to finding social media options embedded in a web site and/or used by a company, then it is hardly surprising that they show a preference towards the tried and true email, website and snail mail.

I certainly would not right off social media on the strength of this study but it is a reality check.

At a recent roundtable conducted by a UK agency, MyClicks.org.uk,

"the majority of the participants, around 75%, were satisfied with their use of social media tools, including social networks, online video, blogs and podcasts. Around 30% stated that social media would be a key element in their communication strategy when preparing 2011 budgets, with the remainder preparing to continuing to ramp-up their presence using these channels to a greater or lesser extent."